Audit 45362

2022-001 CFDA #14.872 ? Public Housing Capital Funds Program ? Wage Rate Requirements Condition and Criteria: The Authority was not able to provide necessary documentation that includes Record of Employee Interviews form HUD-11 as required by the Department of Labor?s Davis-Bacon Act. The Davis-Bacon Act requires a contractor whose contract is over $2,000 to provide weekly certified payrolls to prove that they are paying prevailing wage rates. The Authority is required to perform contractor employee interviews and document on form HUD-11. Amount of Questioned Costs: None. Context: It was determined that the internal controls over Davis-Bacon wage rate requirements were likely to be ineffective due to the fact that the Authority explained that they did not perform contractor employee interviews for the D.W. Builders contract that was selected for audit testing. The Authority was unable to provide the documentation of form HUD-11. Cause: A procedure does not exist whereby the Authority interviews contracted employees to ensure they are being paid fairly per Davis-Bacon wage rate requirements. Effect: The Authority does not have proper controls in place to ensure compliance with the Department of Labor?s Davis-Bacon Act. As a result, contractors could be underpaying works while working on Authority projects. Auditor?s Recommendation: We recommend that the Authority implement procedures to interview employees to ascertain that information is accurate reported on the weekly certified payroll reports is accurate and to document this information on form HUD-11. We also recommend that the Authority maintain this documentation in the contract file. Grantee Response: Management acknowledges the finding and will follow the auditor?s recommendation.

2022-001 CFDA #14.872 ? Public Housing Capital Funds Program ? Wage Rate Requirements Condition and Criteria: The Authority was not able to provide necessary documentation that includes Record of Employee Interviews form HUD-11 as required by the Department of Labor?s Davis-Bacon Act. The Davis-Bacon Act requires a contractor whose contract is over $2,000 to provide weekly certified payrolls to prove that they are paying prevailing wage rates. The Authority is required to perform contractor employee interviews and document on form HUD-11. Amount of Questioned Costs: None. Context: It was determined that the internal controls over Davis-Bacon wage rate requirements were likely to be ineffective due to the fact that the Authority explained that they did not perform contractor employee interviews for the D.W. Builders contract that was selected for audit testing. The Authority was unable to provide the documentation of form HUD-11. Cause: A procedure does not exist whereby the Authority interviews contracted employees to ensure they are being paid fairly per Davis-Bacon wage rate requirements. Effect: The Authority does not have proper controls in place to ensure compliance with the Department of Labor?s Davis-Bacon Act. As a result, contractors could be underpaying works while working on Authority projects. Auditor?s Recommendation: We recommend that the Authority implement procedures to interview employees to ascertain that information is accurate reported on the weekly certified payroll reports is accurate and to document this information on form HUD-11. We also recommend that the Authority maintain this documentation in the contract file. Grantee Response: Management acknowledges the finding and will follow the auditor?s recommendation.